Date:
October 03, 2024
An MIT Professor and renowned economist has predicted that AI will only replace up to 5% of humans in white and blue-collar jobs worldwide.
The hype around Artificial Intelligence is not slowing down, and businesses are getting on the AI gold rush train without putting much thought into the actual value and ROIs it brings to them. Observing the alarmingly rising trend around AI and genAI, an MIT Professor and renowned Economist, Daron Acemoglu, has predicted that the AI market may crash by 2025 end.
The overinvestment pattern being followed by companies in AI capabilities can hurt their bottom line, as indicated by the overblown AI takeover in the US job market. The expert revealed from his study that only 5% of human jobs will either be replaced or heavily assisted by AI in the next decade. Acemoglu told a new media house in an interview that a lot of money is going to be wasted and the world will not have an economic revolution out of that 5%.
According to Daron, corporations have pumped more money than the technology matches its hype. This can work drastically in the wrong direction of revenues, leading to a steep market crash soon.
In the second quarter alone, big tech players like Microsoft, Apple, Alphabet, and Meta have collectively invested more than $ 50 Billion in capital expenses focused on building AI capabilities. Due to this unprecedented spending streak, ChatGPT-maker OpenAI’s valuation soared to $157 Billion after its recent round closed on Wednesday. The fact that the organization is bleeding money and yet growing in valuation promotes the onset of an AI winter.
The MIT professor says that the trustable value provided by any AI software or technology still lacks significantly to replace humans as a viable resource.
“You need highly reliable information or the ability of these models to implement certain steps that previously workers were doing faithfully. They can do that in a few places with some human supervisory oversight…but in most places, they cannot,” said Daron to the media outlet.
The unrestrained spending can result in a ripple effect, beginning from less-than-expected ROIs from AI investments, a sharp shift in investor sentiment, and, eventually, a huge crash in tech stocks. Daron calls it the onset of an AI winter, similar to the one right after the dot-com boom in the early 2000s.
